Gold price forecast: $4,500 support in focus as XAU trades flat

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Gold drops 0.51% today to $4,572.06

Highlights

The Strait of Hormuz closure has disrupted global oil flows, driving prices higher and intensifying worldwide inflation risks.
Central banks in Japan, Europe, the UK, and Australia have raised rates to counter ongoing financial risks from persistent regional tensions.
Gold is consolidating between $4,500 and $4,740, with downside technical pressure but a strong probability of near-term price stabilization.

Supply shocks and central bank action drive gold selling pressure

The closure of the Strait of Hormuz due to escalating regional tensions has resulted in major disturbances to global supply chains, driving up oil prices and contributing to increased inflationary pressures worldwide. In response to these disruptions, several key central banks, including the Bank of Japan, European Central Bank, Bank of England, and Reserve Bank of Australia, have implemented interest rate hikes to address mounting financial risks. Ongoing conflict in the region continues to keep oil prices elevated and maintains uncertainty over monetary policy, while actions by the Brazilian central bank to raise gold reserves reflect broader concerns over geopolitical fragmentation and sovereign debt, though price action has remained under broader selling pressure.

Downtrend momentum persists as key support outlasts resistance breaches

The price is currently below the SMA-20 at $4,717.37 and the SMA-50 at $4,699.26, but remains just above the SMA-200 at $4,564.83. The Ichimoku Kijun line sits at $2,442.00, serving as a notable underlying support. Momentum indicators on the daily chart, including the ADX and MACD, signal a selling bias, with the RSI at 42.35 reflecting mild weakness. While most oscillators confirm downside pressure—particularly BBP in deep oversold—CCI and Stoch RSI remain neutral, and the Awesome Oscillator supports the prevailing negative momentum. After a small overnight gap up, gold reversed quickly to test the lower end of today's range ($4,529.60–$4,616.17), indicating heightened volatility and sustained intraday pressure. A mild divergence in some oscillators hints at slightly less overwhelming bearishness in the very short term.

Upside potential rises as volatility bands define trading range

Over the next five sessions, gold is most likely to hold between $4,500 and $4,740, a typical volatility band relative to current levels. The probability of a near-term price increase is assessed as very high, with supportive weekly technical signals reducing the likelihood of deeper short-term declines. If price consolidates between $4,500 and $4,740, a sideways scenario is in play. A breach of $4,740 would trigger upside momentum, while failure of support at $4,500 could prompt further selling toward the SMA-200.

Viktoras Karapetjanc, senior analyst at Traders Union, sees the current gold pullback as a reflection of tightening global financial conditions and ongoing geopolitical volatility. He believes that central bank activity and persistent conflict are maintaining underlying demand, despite short-term bearish momentum. The analyst notes that technical signals suggest downside pressure is softening, and the likelihood of a sustained price rebound remains high. "I expect gold to hold its range and see renewed upside momentum if global risks remain elevated and central banks continue diversifying reserves."

Earlier, analysts noted that strong physical gold demand had failed to offset persistent technical weakness and ongoing bearish momentum in the market. The current environment of heightened geopolitical risks and proactive central bank responses introduces new upside catalysts, making the $4,740 resistance level a pivotal threshold for any sustained bullish reversal in the sessions ahead.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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